In fact, HUD financing may become even more enticing to senior housing borrowers this year, especially with The Federal Reserve on Wednesday raising its benchmark interest rate for the second time in three months.

The Federal Reserve’s decisions more directly influence short-term interest rates, not long-term ones. LIBOR rates, for instance, are getting more expensive as The Fed increases rates—but that’s not the case with the interest rates offered by HUD, Brent Holman-Gómez, senior vice president of originations/operations/asset management at Cambridge Realty Capital, told SHN.

“The interest rates that are increasing right now are short-term interest rates, but long-term interest rates remain at historic lows,” Holman-Gómez said. “The rates, right now, are below 4%—at most times in history, that’s a shockingly low rate to be able to lock in for the entire life of your loan.”

“The yield curve has been flattening since The Federal Reserve started its rate increases,” Delaveris explained. “Short-term rates have been rising proportionally more than long-term rates have been increasing.”

For senior housing borrowers, there’s currently a lower relative cost of long-term financing, compared to short-term financing, he said.

“That would increase the appeal of a long-term financing program,” Delaveris said.

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HUD financing will always have a place in senior housing, no matter the interest rate environment, experts suggested.

“Many of the attributes of the HUD program are attractive regardless of the interest rate environment,” Delaveris said. “The rates available under the HUD program should always be competitive and appealing.”

Plus, the HUD program is that “total package of nonrecourse, fixed-rate, long-term and relatively high leverage,” he added. There’s plenty about the HUD program that makes it enticing, Holman-Gómez agreed.

“My favorite aspect of [the HUD program] is that it is a fully amortizing mortgage; you can take out a mortgage for 35 years and there’s no balloon—you just pay every month, and after 35 years, it’s gone,” Holman-Gómez said. “That is sort of an unspoken point of huge value.”

President Donald Trump’s proposed budget, announced Thursday, doesn’t impact the HUD 232 program as it currently stands, Michael Gehl, CIO at Housing & Healthcare Finance LLC, told SHN. Even though the proposed budget is not at all definitive, Gehl predicted the final budget won’t impact the 232 program, either.

“Just because you propose it doesn’t mean it’s what’s going to be passed,” Gehl said. “The 232 program actually generates revenue for the government.”

Depending on how the Trump administration performs, Gehl said, the HUD program could definitely gain in popularity.

“If people believe interest rates are going up, why not lock it in now?” he said.

The impending wave of baby boomers into the senior population will bring more than just massive numbers of potential residents. This isn’t merely a question of bulk. It’s a question of breadth, with a wider range of seniors becoming inherently trickier to serve.

Health care costs for seniors are soaring, health levels are plateauing and experts across the care continuum are searching for fixes to both. The answer could be found by going back to the basics in medical care.